During the third quarter of 2021, Germany's GDP recorded a decrease in its year-on-year change compared to the previous quarter, thus registering a year-on-year rate of 2.57%. This drop was due to a decline in both external and domestic demand, due to a higher comparative rate and supply chain bottlenecks. On the labour market, the unemployment rate decreased from the previous quarter to 3.27%, while the year-on-year change in employment increased to a rate of 0.39%. Inflation stood at 3.90%, having accelerated from the previous quarter. Finally, the euro depreciated against the US dollar, with an average exchange rate of 1.18 $/€ during the third quarter of the year.


Macroeconomic outlook report: Germany 3Q21

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Macroeconomic overview

  • During the third quarter of the year, the German economy recorded a decrease in its y/y GDP variation rate of 6.84 p.p. compared to the previous quarter, down to a rate of 2.57%. The relaxation of Covid restrictions contributed to the consolidation of the recovery of the German economy, although it suffered from supply chain bottlenecks.
  • Domestic demand registered a decline of 2.99 p.p. from the previous quarter to a rate of 3.61%. This was mainly due to the fall in year-on-year growth in private consumption. Regarding external demand, exports recorded a decline of 19.75 p.p. from the previous quarter, but still registered a positive growth rate of 5.58%. Year-on-year growth in imports also fell, although to a lesser extent, with a variation of 10.72 p.p. to 8.70%.
  • With regards to the labour market, the unemployment rate declined from the previous quarter to a rate of 3.27%, while the year-on-year change in employment increased by 0.38 p.p. from the previous quarter to 0.39%.
  • The euro depreciated against the US dollar compared to the second quarter of 2021, recording an average exchange rate of 1.18 $/€ in 3Q21.
  • Inflation stood at 3.90 % during the third quarter of 2021, after recording an increase of 2.23 p.p. compared to the previous quarter.

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